October 13, 2013

Maersk: Arctic Shipping "Not a Short-Term Opportunity

Maersk: Arctic Shipping "Not a Short-Term Opportunity"

As Arctic ice melts, Andersen says the routes will eventually become more useful

Arctic shipping routes will have little impact on the shipping industry for at least 15 years, AP Møller-Maersk CEO Nils Andersentold the Financial Times.

"This is not a short-term opportunity," he said.

"We will see some single ships sailing through the Arctic . . . But the reality is, for commercial shipping such as container shipping, this is not something that will happen within the next 10 to 20 years."

Maersk, which carries 15 percent of seaborne freight, moves hundreds of thousands of containers annually through the Suez Canal, but Andersen said that, despite the fuel savings that can be realised by going through the Arctic, other costs are higher.

"The problem is just that you have to have icebreakers, you have to be very sure that you hit the right window during the year so you don't run into icebergs, and things like that," he said.

Other shipping executives say difficulties with insurance for Arctic voyages and emergency help in the far north are both barriers to the trips.

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It's far too early to start constructing vessels for it

Nils S. Andersen, CEO, Maersk

Use of the Northern Sea Route (NSR), also known as the northeast passage, for travel between Asia and Europe, has grown dramatically in recent years, but still represents a fraction of traffic through the Suez Canal.

The northwest passage between Western North America and Europe, which bypasses the Panama Canal, saw its first-ever bulker voyage this year.

Russia predicts that most traffic on the NRS by 2021 will involve transportation of oil and gas from the Russian north, not cargo ships using the route as a shortcut.

"The way global warming is going, of course there is the opportunity in a very far, very distant future that the northern sea route will open up and it will be a major shipping route," Andersen said.

"But it will definitely not be within the next 15 to 20 years in our opinion so it's far too early to start constructing vessels for it."